Over at UNEASYsilence, this post deals with the issue of Windows hard drive sizes in Parallels. Specifically, it details how to make Windows recognize the true size of a hard drive that you expanded with the Parallels Image Tool. It may look complicated, but if you follow the steps, it's actually pretty easy.

[robg adds: In the comments, there are a couple of alternative methods suggested, including one by Tony D that looks much, much simpler -- if it works. I haven't tested any of these, so proceed at your own risk. I strongly recommend backing up your virtual Windows disk before starting.]